Have you ever stumbled upon the term GAP insurance? If you have, you are in luck, because in this article we will discuss everything you need to know and understand about this unique insurance policy. If you haven’t heard of Guaranteed Asset Protection (GAP) Insurance, buckle up as you are about to receive a lot of information today.
What is Gap Insurance?
Guaranteed Asset Protection insurance is a special type of insurance that protects you financially in case your vehicle is written off, stolen, or you are unable to pay off the lease. It is popular across the globe, but not very much so in New Zealand since car insurance is not a legal requirement in the country. Not many people bother with third-party insurance let alone comprehensive insurance coverage. So, GAP is a distant concept for most New Zealand people.
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Why You Might Need It
When money is hard to come by, you look for something to lean on, trying to find a way out of the financial crunch. At such times, paying off the car loan can become difficult and sometimes impossible. That’s where GAP insurance comes in and saves the day. If you have this type of insurance, the insurer will pay off your loan, leaving you with peace of mind.
However, you should keep in mind that the insurer will cover the cash value of your car instead of its current value. In other words, if you owe more for the car than it is worth, the insurer will take care of the cost and help you out.
You are also protected from theft and damage. Although, if your vehicle has been written off, you don’t necessarily need GAP. You can always get cash for cars at a car removal company. When you sell to car wreckers you get better value for your vehicle, and you don’t have to pay premiums.
How Much Does It Cost?
The price you will pay can vary depending on several factors. The make and model of your car, the coverage duration and your deductible. Generally, it doesn’t cost too much, especially when you consider the peace of mind you will get with the policy.
Conclusion
GAP insurance might not sound like a good idea to some but if you look at it collectively, having some sort of coverage is always beneficial in the longer run. Not only do you have peace of mind, you feel safer buying, parking or disposing of your vehicle.
